HHS drug importation proposals aim to address high costs


The Department of Health & Human Services is taking the first steps in allowing drugs to be imported into the United States.

Health & Human Services Secretary Alex M. Azar II Wikimedia Commons/WWsgConnect/CC-SA 4.0

Alex M. Azar II

HHS proposes to offer two different pathways for importation: One allowing states to design programs to import certain drugs directly from Canada and another allowing manufacturers to obtain a new National Drug Code (NDC) number to import their own Food and Drug Administration–approved products manufactured outside of the United States.

“The importation proposals we are rolling out ... are a historic step forward in efforts to bring down drug prices and out-of-pocket costs,” HHS Secretary Alex Azar said during a Dec. 17, 2019, press conference. “New pathways for importation can move us toward a more open and competitive marketplace that supplies American patients with safe, effective, affordable prescription drugs.”

The proposals were made public on Dec. 18, the day the House Rules committee was scheduled to vote on impeaching President Trump.

He emphasized that these proposals “are both important steps in advancing the FDA’s safe-importation action plan, [which] aims to insure that importation is done in a way that prioritizes safety and includes elements to help insure importation does not put patients or the U.S. drug supply chain at risk.”

The pathway for states to import drugs from Canada will be proposed through the federal regulatory process. The notice of proposed rulemaking, which implements authority for FDA regulation of importation granted in the Medicare Modernization Act of 2003, will outline a process by which states, potentially working with wholesalers and/or pharmacies, will submit proposals for FDA review and approval on how they would implement an importation program.

Only certain drugs would be eligible for importation from Canada under this proposal. The drugs would need to be approved in Canada and, except for Canadian labeling, need to meet the conditions of an FDA-approved new drug application or abbreviated new drug application.

Controlled substances, biologics, intravenously injected drugs, drugs with a risk evaluation and management strategy, and drugs injected into the spinal column or eye would be excluded from importation.

Drugs coming in from Canada would be relabeled with U.S.-approved labels and would be subject to testing to ensure they are authentic, not degraded, and compliant with U.S. standards.

States would be required to show that importing drugs poses no additional risk in public health and safety and it would result in the reduction of costs, according to information provided by HHS.

Many of the most expensive drugs, as well as insulins, would not be eligible for importation under this pathway, Mr. Azar acknowledged, adding that “I would envision that as we demonstrate the safety as well as the cost savings from this pathway, [this could serve as] a pilot and a proof of concept that Congress could then look to and potentially take up for more complex molecules that involve cold-chain storage and more complex distribution channels.”

The proposed regulations do not offer any estimates on how much savings could be achieved. He said that there is no way to estimate which states might develop importation plans and how those plans might work.

The second proposed pathway would involve FDA guidance to manufacturers allowing them to import their own FDA-approved products manufactured abroad. Under this proposal, there would be no restriction on which type or kind of FDA-approved product to be imported.

“The FDA has become aware that manufacturers of some brand-name drugs want to offer their drugs at lower costs in the U.S. market but, due to certain challenges in the private market, are not readily [able] to do so without obtaining a different national drug code for their drugs,” Adm. Brett Giroir, MD, HHS assistant secretary for health, said during the press conference.

Obtaining a separate NDC for imported drugs could address the challenges, particularly those posed by the incentives to raise list prices and offer higher rebates to pharmacy benefit managers, Mr. Azar said.

The draft guidance outlines procedures manufacturers could follow to get that NDC for those products and how manufacturers can demonstrate that these products meet U.S. regulatory standards. Products imported in this pathway could be made available to patients in hospitals, physician offices, and pharmacies. Generic drugs are not part of this guidance, but the proposed guidance asked for feedback on whether a similar approach is needed for generic products.

“This would potentially allow for the sale of these drugs at lower prices than currently offered to American consumers, giving drugmakers new flexibility to reduce list prices,” Mr. Azar said.

The proposed regulation on state-level importation will have a 75-day comment period from the day it is published in the Federal Register, and Mr. Azar said that the FDA is committing resources to getting the comments analyzed and reflected in the final rule.

“We will be moving as quickly as we possibly can,” Mr. Azar said, adding that the FDA guidance to manufacturers may move more quickly through its approval process because it is not a formal rule.

Next Article: